Kraft Foods Chief Explains Split from Altria

Kraft Foods — maker of Jell-O, Oreos and Velveeta cheese — is breaking with its parent company, Altria Group, once known as Philip Morris. Kraft CEO Irene Rosenfeld talks about why the company made the decision.

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STEVE INSKEEP, host:

You know, a lot of the foods that you probably grew up with - Oreos, Jell-O, Velveeta - owned by one company, Kraft Foods, America's number one food company, which is also a pop culture icon.

(Soundbite of Kraft commercials)

Unidentified Woman: Oh, I wish I were an Oscar Mayer wiener. That is what I'd truly like to be.

Mr. BILL COSBY (Comedian): There's an easy way to make Jell-O instant pudding.

Unidentified Man #2: Pardon me, would you have any Grey Poupon?

Unidentified Man #3: You mean, the mustard?

INSKEEP: Today Kraft is leaving its parents. It's splitting off from Altria, formerly known as the cigarette maker Philip Morris. The decision to trade as a separate stock is one of many changes at a $34-billion food company. And here to talk with us about that and more is Irene Rosenfeld. She's CEO of Kraft Foods. Welcome to the program.

Ms. IRENE ROSENFELD (CEO, Kraft Foods): Thanks, Steve.

INSKEEP: The basics first, why split off from what was once known as Philip Morris?

Ms. ROSENFELD: Well, it's a terrific opportunity for us to be able to make better use of some of our financial capabilities, as well as to pursue some new growth opportunities for the company.

INSKEEP: May I try to put that in layman's terms. When you say make better use of your financial capabilities, do you mean make sure that Kraft's money is not tied up in tobacco lawsuits?

Ms. ROSENFELD: No, I wouldn't - certainly wouldn't express it that way. I think the reality is, though, that there were certain requirements as a subsidiary that would make it easier for us to use our stocks as currency and potential acquisitions, the opportunity to add to our scale in geographies outside North America, and a variety of other ideas that really can help people to eat and live better today.

INSKEEP: When parents get concerned about childhood obesity, and there's certainly been plenty of studies about that in recent years - it's a constant topic - how is that affect you, because you are a company that has a reputation for putting out foods that are in many cases high in fat and other things that people consider undesirable?

Ms. ROSENFELD: Our focus, Steve, is on providing whatever consumers need. And there's no question that more and more consumers are looking for ways to control their weight. So we are making reduced fat, reduced calorie versions of virtually all of our classic products. But nobody is willing to trade off the great taste of the food that they're eating for the benefit of having some other nutritional properties...

INSKEEP: Do you...

Ms. ROSENFELD: ...because at the end of the day that's what they care about.

INSKEEP: Well, now, do you as CEO have that moments from time to time where someone brings you the 10-calorie, high-fiber hotdog and you try it our just to see whether it's edible or not?

Ms. ROSENFELD: I sure do. I sure do. And sometimes it doesn't leave my office.

(Soundbite of laughter)

INSKEEP: Straight in the trashcan.

Ms. ROSENFELD: That's correct.

INSKEEP: I want to ask you a question about the broader industry that you're in. the City University Of London put out a study last year of 25 large food companies, Kraft was among them. It found that, and I'm quoting here, "some companies are reviewing their product ranges in the light of the new health agenda, which is welcome, the majority are not." Now, that report gave higher marks to Kraft than some other companies but overall did not look favorably upon your industry.

Ms. ROSENFELD: Well, I think there's a real concern about how people are eating today. The fact is consumers love hotdogs. They love macaroni and cheese. They love cereals. So, without a doubt, continuing to look at the overall health and wellness of our foods is critically important to our success, but we have to do it in a way that is convenient for consumers.

INSKEEP: Any idea what's you're having for lunch today?

Ms. ROSENFELD: I think I'm going to have a salad. We have a terrific new line of salad products that we're testing called Fresh Creations and I'm looking forward to having one of them for lunch today.

INSKEEP: Okay.

(Soundbite of laughter)

INSKEEP: Well, Ms. Rosenfeld, thanks for taking the time. I really appreciate it.

Ms. ROSENFELD: My pleasure, Steve.

(Soundbite of commercial)

Unidentified Man #4: (Singing) Ooh, yeah, I'm on my way.

Unidentified Group: (Singing) You can feel it coming home. (unintelligible)

Unidentified Man #4: (Singing) Here I come to save the day.

Unidentified Group: (Singing) Got to have some now.

Unidentified Man #5: You can do it.

Unidentified Group: (Singing) Kool-Aid to the rescue.

INSKEEP: This is NPR News.

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